What's ahead for Valeant
In the wake of a solid debut performance at Valeant Pharmaceuticals, we now know how frishly minted CEO Joe Papa plans to turn around the deeply troubled drug company. Coming out of Tuesday's annual meeting Tuesday, the question is can Mr. Papa pull it off?
What are the odds the veteran pharmaceutical executive pulls off a high-wire restructuring, and what does success at Valeant actually look like? Recent corporate history offers something of a guide.
The best case scenario for Valeant shareholders: The company follows the path of General Electric, post-Jack Welch and '08 financial crisis, with Papa pulling off a shareholder-friendly restructuring by focusing a sprawling business, strengthening the balance sheet and build a winning culture.
The worst case: Valeant is the next Nortel, on an arc from corporate hero to zero as a new CEO proves unable to recover from the previous regime's takeover binge, scandals and debt woes. Full Story
IPO market showing signs of life
The sleepy Canadian initial public offering market got a swift kick in the past few weeks as the first companies of the year filed to make their stock market debut.
So far, no new businesses have begun trading on the Toronto Stock Exchange in 2016, mirroring similarly lacklustre conditions in the U.S. markets against the backdrop of unsteady global economic conditions and a pullback in lofty startup valuations.
But all that is poised to change as MCAP, a mortgage company, and PointClickCare Corp., which makes cloud-based software for the senior care industry in North America, are both looking to list publicly. Several other burgeoning Canadian companies in the technology and other industries are also thought to be close to be toeing the border-crossing onto the public markets. Full Story
In defence of of dual-class shares
Companies listing on stock markets for the first time are increasingly driven to use unequal voting shares because investors are making it hard for entrepreneurs to grow a new business without fear of takeover, said Quebec pension fund head Michael Sabia.
Mr. Sabia, chief executive officer of the Caisse de dépôt et placement du Québec, told a Toronto audience Tuesday that he has grown increasingly sympathetic toward companies that use dual-class shares appropriately because markets are becoming more impatient and more short-term oriented.
"It's about trading, not building, in the capital markets," he said. "And I think a lot of these companies want the time to build, and they want the ability to invest. And a founder wants to be able to continue to drive the strategy of the business."
A growing number of technology companies -- including Alphabet Inc., Facebook Inc., Alibaba Group Holding Ltd. and Shopify Inc. -- have gone public on stock markets with two classes of shares, with one class held by insiders that gives them additional voting rights so they can retain control over the company. In the United States,14 per cent of initial public offerings in 2015 had dual-class shares, Mr. Sabia said, a shift from just 1 per cent in 2005.
While major pension funds and institutional investors have traditionally been opponents of shares that give company insiders voting control that is out of proportion to their level of share ownership, Mr. Sabia told the annual meeting of the Canadian Coalition for Good Governance that he has grown more supportive as he has watched capital markets become more focused on short-term returns at the expense of long-term growth. FULL STORY
ON THE MOVE
Desjardins' new CEO restructures his executive team
Less than three months after being elected chief executive officer of Desjardins Group, Guy Cormier has made sweeping changes to his executive team in a move that suggests he is shifting the direction of the Quebec-based financial co-op. Full Story
Uber Technologies Inc. is turning to the so-called leveraged-loan market for the first time to raise as much as $2 billion, in a sign of the popular ride-sharing network's hunger for cash as it expands around the world. Uber has hired Morgan Stanley and Barclays PLC to sell a so-called leveraged loan of $1 billion to $2 billion to institutional investors, people familiar with the matter told the Wall Street Journal. FULL STORY
U.S. hotel chain Marriott International is on track to win unconditional EU antitrust approval for its cash and share purchase of Starwood Hotels and Resorts Worldwide Inc, a person familiar with the matter said on Tuesday. FULL STORY
IN CASE YOU MISSED IT
Shane Dingman on Toronto's League Inc., which announced one of the largest Series A venture capital funding rounds in Canadian tech history with a $33-million investment lead by OMERS Ventures. FULL STORY
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